An update on Zuora

The share pulled back sharply not so much because of the earnings which were 41 cents per share versus expectations of 44 to 40 cents. Instead, the forward guidance was disappointing. The company predicted losses of 15 to 13 cents but Wall Street had been expecting 11 cents per share.

That resulted in an instant rerating of the share and it dropped abruptly. The problem now is the runway to profitability has been lengthened. That is going to take time to recover from. Zuora has been a high growth company in a high growth sector so slowing returns is not a positive development. I am going to have to see the recent lows hold and a pathway to growth evolve over coming weeks if we are to continue to hold the position.

All the best,

Eoin Treacy
Investment Director, Frontier Tech Investor

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